Young Adults to Have Expanded Health Insurance Access

An Ohio law that allows unmarried children or stepchildren up to age twenty-eight (28) to remain or be added to their parent’s insurance coverage becomes effective July 1, 2010.   As a result of the new law, parents should evaluate the opportunity and the cost of this new coverage.  The Director of the Ohio Department of Insurance, Mary Jo Hudson, wrote in a release that [a]n estimated 20,000 additional young adults, who are more likely than any other age group to be uninsured, will now be eligible for coverage."  The statement continued: “These changes, combined with our work to implement the recently passed federal reforms, are granting more Ohioans access to coverage and decreasing the number of uninsured Ohioans." The state reform will work in tandem with the federal law dependent age change that becomes effective September 23, 2010. Previously, only dependents up to age 19, or up to 23 years old if they were still in school, were eligible to receive coverage under their parents’ policies.  Under the new law, insurers are required to provide parents with specific information about the availability of this coverage to help them make a decision whether to keep or add a child to their plan .  The Ohio Department of Insurance has created a dynamic health reforms page at www.healthcarereform.ohio.gov that includes a breakdown of the state and federal reforms being implemented in Ohio. The website includes information on the dependent age change, such as:  How can a parent enroll an older age child for this coverage? The parent should contact the employer or insurer to ask how to enroll the older age child and what the cost of the coverage will be. How do the state and federal laws work together? The federal law requires that health plans and health insurers that offer dependent coverage make coverage available under the plan until a child reaches age 26. Health insurers and health plans subject to state law must provide coverage or offer the parent the opportunity to purchase coverage for the child from age 26 until age 28, at which age the coverage extension ends. When will coverage for older age children be available? State law applies to new and renewing plans beginning on July 1, 2010. Federal law applies to new and renewing plans beginning on September 23, 2010. If an employer’s plan renews on August 1, 2010, the plan must offer the extension coverage required under state law beginning on August 1, 2010. The plan will not be required to offer the extension coverage required under federal law until August 1, 2011, the first renewal after September 23, 2010, the effective date of the federal law. When may an older age child enroll? The federal law includes a transition rule which requires the health plan or health insurer to give the parent written notice of the opportunity to enroll a currently eligible child and at least 30 days to actually enroll. The notice and opportunity to enroll may be provided during the employer’s open enrollment period, but must be provided no later than the first day of the first plan year beginning on or after September 23, 2010. Coverage begins on the first day of the first plan year even if the request for enrollment is made after the first day. In addition to during the annual open enrollment period, a parent may enroll an older age child for state coverage when the child reaches the federal limiting age of 26, or when the employer or insurer is notified that the child has experienced a change in circumstances and has become newly eligible for coverage under state law, for example, the 26 year old child has just moved back into Ohio. Is there a difference between who pays for state and federal older age child coverage? Yes. For coverage up to age 26 under the federal law, the cost to the parent may not vary based upon the age of the child. Surcharges that apply only to older age children are not allowed. For coverage between age 26 and age 28 under state law, the employer is not required to pay for any part of the cost. An employer may choose to do so, but it is not required under state law. What rate can a carrier charge an older age child for coverage between age 26 and age 28?   The rate charged for coverage between age 26 and age 28 should be derived from the average child dependent rate for the group or product. The methodology to develop this rate should be actuarially sound. A carrier can charge an older age child a single rate as long as the rate is derived from the dependent rate. Carriers may not use the single employee rate without adjustment or a COBRA rate instead of the implied cost of dependent coverage. Ohioans with questions concerning the new state and federal health care reforms can contact the Ohio Department of Insurance at 1-800-686-1526. Additional information, including fact sheets, brochures, FAQs, an implementation timeline and key links can also be obtained at www.insurance.ohio.gov in the health reforms section.